http://www.tradingmarkets.com/news/stoc ... 01982.html
- Sep 30, 2010 (SECURITIES AND EXCHANGE COMMISSION RELEASE/ContentWorks via COMTEX) --
The Securities and Exchange Commission today charged a pair of freight railway employees and four family members with perpetrating an insider trading scheme that garnered more than $1 million in illegal profits.
The SEC alleges that W. Gary Griffiths and Cliff M. Steffes learned confidential information in early 2007 about the upcoming acquisition of Florida East Coast Industries
Inc. (FECI), which owned the freight railway where they worked in Jacksonville, Fla. Griffiths and Steffes tipped family members with the non-public information. The traders collectively purchased more than $1.6 million in company stock and options ahead of the May 8, 2007 announcement of the acquisition of FECI by an affiliate of Fortress Investment Group LLC.
"We allege these individuals exploited their personal and family relationships for monetary gain and that their misuse of confidential information gave them an illegal advantage over other traders in the market," said Merri Jo Gillette, Director of the SEC's Chicago Regional Office.
I had not been aware of this matter until reading New York Times' columnist Andrew Ross Sorkin's Tuesday column:
http://dealbook.blogs.nytimes.com/2010/ ... r-trading/
- Have you heard about the railroad workers charged with insider trading?
Late last month, the Securities and Exchange Commission brought an unusual and colorful insider-trading case: It accused two employees who worked in the rail yard of Florida East Coast Industries and their relatives of making more than $1 million by trading on inside information about the takeover of the company.
How did these employees — a mechanical engineer and a trainman — know their company was on the block?
Well, they were very observant.
Naturally it is against applicable Security Trading laws for an insider, such as the CEO or any employee, even if a Secretary, to trade securities based on information gained in the performance of duties. But a Trainman holding a Yard job and observing unusual comings and goings?
It would appear that even railfans should not be too quick to call their Broker and take positions on the strength of observations made in the pursuit of their hobby.
All told, based upon facts of which there is public knowledge: "over the top".